ICU Research: Treasury sway liquidity

Last week, erratic Treasury operations resulted in volatile banking sector liquidity that moved within UAH75-78bn. Last Friday, liquidity rose UAH2.49bn to UAH77.91bn including purchased additional ON CDs. Total ON CDs outstanding rose UAH5.04bn to UAH37.79bn, while banks' correspondent accounts with the NBU declined UAH2.55bn to UAH40.12bn.

Last Friday, UAH4.34bn inflow from the Treasury covered all outflows, including UAH1.78bn via exchanges of reserves into cash. The NBU provided no additional funds via monetary operations.

Investment implications: The large positive inflow from the Treasury was caused by a decrease in revenues and an increase in expenditures paid that day. Over the next few days, liquidity could remain highly volatile at about current level.